By Clara Denina and Zandi Shabalala

LONDON (Reuters) – Kyrgyzstan will take full management of the Kumtor gold mine (KGC), its greatest industrial enterprise, below an out-of-court settlement with Canada-based Centerra Gold after a collection of authorized disputes over the previous yr.

Kyrgyzstan will surrender its 26% stake in Centerra, having seized KGC from the Canadian miner in Could 2021. The seizure led to a spate of litigation earlier than a call to refer the matter to arbitration.

The central Asian nation had accused Centerra of assorted transgressions together with environmental injury and corruption.

Centerra denied all wrongdoing.

“Via this settlement, now we have been in a position to make sure a full and irrevocable handover of our best nationwide treasure, the Kumtor gold mine, to Kyrgyzstan,” President Sadyr Japarov mentioned in a televised announcement.

As a part of the settlement, state-owned gold miner Kyrgyzaltyn will personal Kumtor and can retain the revenue it earned from the mine because it was seized.

In trade, Kyrgyzaltyn will surrender its possession of shares in Centerra, which may even make a money fee totalling $86 million, partly to repay an impressive mortgage to KGC and to protect and shield the nation’s pure assets.

The shares can be cancelled. The deal means Centerra fully exits actions in Kyrgyzstan.

Centerra and Kyrgyzstan, which have an extended historical past of disputes over the best way to share income from the 550,000-ounce a yr mine, have additionally agreed to finish all authorized proceedings towards one another with no admissions of legal responsibility.

“All through this dispute, now we have maintained that this isn’t about nationalisation … It was concerning the particular points with the administration of (the) Kumtor mine. We’ve all the time mentioned that Kyrgyzstan is open for enterprise,” Japarov mentioned.

Toronto-listed shares in Centerra, which misplaced 34% of their worth in 2021, have rebounded by 29% to this point this yr on expectations that the dispute could be resolved outdoors worldwide courts, and on rising gold costs.

The Kumtor mine is predicted to supply at the least $5 billion from the 160-200 tonnes (564,000-700,000 ounces) of gold anticipated to be mined within the subsequent 10 years, the president mentioned, citing consultants.

The settlement will permit Centerra to concentrate on its core operations, the corporate’s president and chief government Scott Perry mentioned in an announcement. Centerra owns belongings in Canada and Turkey.

The deal is topic to situations together with Centerra shareholder approvals and the abandonment of the varied lawsuits.

($1 = 1.2485 Canadian {dollars})